Children's home providers call for fee increases

Neil Puffett
Tuesday, March 15, 2016

Placement fees paid by local authorities to children's homes providers must be increased if the sector is to cope with rising costs, it has been claimed.

There are currently more than 8,320 children and young people in children’s homes throughout England. Picture: Robin Hammond
There are currently more than 8,320 children and young people in children’s homes throughout England. Picture: Robin Hammond

An annual survey of members by the Independent Children’s Homes Association (ICHA), found that the majority of providers have held their fee rates at a constant level “for many years”.

A report based on the survey states that “local authority stringency means children’s homes are facing an uncertain future”.

A total of 41 per cent of providers said their profit levels had declined compared with 12 months before, with 38 per cent stating they had stayed the same, and 21 per cent saying they had increased.

Around 60 per cent of providers said they were “at best unsure” about the future of the sector, with finance given as a reason for this.

Meanwhile, the last six months of 2015 is reported by providers as showing an increase in the proportion of providers operating below 75 per cent occupancy rate (33 per cent compared with 26 per cent in June 2015). The ICHA said 75 per cent rate is used as a “rule of thumb” level below which losses are likely.

“It is clear that after many years of holding prices, unchanged this year, fees must rise,” the report states.

Jonathan Stanley, chief executive of the ICHA, said providers are being asked to operate at thresholds that are stretched to breaking point.

“The early warning is that yet more financial stringency is not a solution,” he said.

“Local authorities must end the famine of fees and realistically and responsibly finance the future. The situation cannot wait.”

“There are two strengths to invest in, even in these adverse circumstances, Ofsted outcomes continue to increase, and morale is holding.

“We need swiftly to do different and end the declining income for most providers. We need jointly created solutions, working from needs analyses to establish what we need and where we need it.”

In December, figures published by Ofsted showed that the number of children's homes to be judged “good” or better had risen by 13 percentage points over the previous year.

There are currently more than 8,320 children and young people in children’s homes throughout England, making up around 12 per cent of the total number of children in care, with councils spending more than £1bn a year.

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